On January 1, Father (Dave) Loaned Daughter (Debra) $100,000 to Purchase

Multiple Choice

On January 1, Father (Dave) loaned Daughter (Debra) $100,000 to purchase a new car and to pay off college loans. There were no other loans outstanding between Dave and Debra.The relevant Federal rate on interest was 6 percent.The loan was outstanding for the entire year.

A) If Debra has $15,000 of investment income, Dave must recognize $6,090 of imputed interest income.
B) Dave must recognize $6,090 of imputed interest income regardless of the amount of Debra's investment income.
C) Debra must recognize $6,090 of imputed interest income.
D) Debra must recognize $6,090 of imputed interest income if Dave has at least $6,090 of investment income.
E) None of these.